Japan’s Intervention May Have Totaled $6.5 Billion, Nomura Says

March 22 (Bloomberg) -- The Bank of Japan may have spent
about 530 billion yen ($6.5 billion) when it intervened in the
currency markets last week in an effort to stabilize exchange
rates, according to Nomura Holdings Inc.

The central bank projected an 830 billion yen balance in
its “Treasury funds and others” holdings today before it
publishes its current account balance tomorrow. Before the BOJ,
and other Group of Seven nations, intervened in the currency
market, brokers estimated the amount would total 300 billion
yen, according to Nomura.

The BOJ probably spent 500 billion to 600 billion yen when
it intervened March 18, Nomura analysts led by Jens Nordvig
wrote in a note to clients today.

“Historically, ‘Treasury funds and others’ increase two
business days after intervention, providing an initial
indication of the amount spent in intervention,” said Nordvig,
a managing director of currency research in New York. “The
estimate is also smaller than some expected and smaller than
figures reported in the press.”

The Japanese currency fell the most in more than two years
against the dollar March 18 after the BOJ was joined by other G-7 central banks in an effort to stabilize foreign exchange
markets. The yen had surged 4.5 percent in 26 minutes the day
before to a post-World War II high amid speculation Japanese
investors would repatriate assets to pay for rebuilding after
the March 11 tsunami and resulting nuclear power crisis.

International support of the BOJ’s intervention may have
led the central bank to need less money to achieve its goal of
keeping dollar-yen above 80, Nordvig wrote.

The BOJ unilaterally sold 2 trillion yen in September after
the currency climbed to 82.88 per dollar, the strongest at that
time since 1995.